GEORGE OSBORNE is getting some conflicting advice from Tory MPs about the key measures to be included in his Budget this month.

With the next general election just over a year away, Tories overwhelmingly believe that income tax cuts are needed urgently.

While the Chancellor may want to concentrate on cutting the Treasury's still mammoth deficit, backbenchers want a strong signal that the public finances are on the mend and the party is committed to letting the hard-working keep hold of more of their own money.

But Tory MPs are divided over who should benefit from any reductions in personal taxation.

At a meeting of the 1922 Committee of Tory backbenchers this week, the Chancellor heard a strong case put by the self-styled "Blue Collar Conservative" MPs for further hikes in the basic rate income tax threshold, which is already set to reach the Coalition's target of £10,000 from April.

They believe hiking the threshold towards £12,000 to take millions more of the low-paid out of the tax altogether can help their ambition of supplanting Labour as the true "workers' party".

It is a policy that is particularly attractive to Tory MPs in marginal constituencies where the main threat is from Labour.

Robert Halfon, the MP for Harlow in Essex, has been a leading figure pressing the Chancellor on the issue.

Yet others are concerned the Conservative Party is taking its core vote for granted.

"We have got to do something for the middle class.

We should not forget that many middle-income voters are still very angry about the Chancellor cutting Child Benefit," one backbencher told me.

One fear is that an increasing number of middle-income voters are being sucked into the higher-rate income tax band.

The threshold for the 40 per cent rate has fallen from £37,401 a year to £31,866 under Mr Osborne, hitting experienced police sergeants, senior teachers and many others in middle-ranking jobs.

"If that tax raid on the middle class had come in overnight there would have been a revolution.

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Treasury officials see the tax cut speculation as a distraction from the main task of cutting the deficit and entrenching the economic recovery

We have got away with it only because it happened by stealth," another MP pointed out.

Ministers argue that raising the basic-rate threshold cuts tax for all income-tax payers.

But some MPs fear that taking people out of income tax altogether means they will have less incentive not to vote for parties with big spending plans at future elections.

And they note evidence that suggests that people at the lower end of the income scale are less likely to bother to vote at all.

Treasury officials see the tax cut speculation as a distraction from the main task of cutting the deficit and entrenching the economic recovery.

Whitehall insiders indicate that the Chancellor is planning a sober and solid Budget focused on encouraging business growth rather than pre-election giveaways.

Above all his main concern is to avoid a repeat of his shambolic 2012 Budget which unravelled within days and led to a string of embarrassing U-turns.

At the 1922 Committee meeting, Mr Osborne was said to have listen intently to the views of Tory MPs without giving away a glimmer of the measures being prepared for stuffing into the red Budget briefcase on March 19.

Given his ambitions to succeed David Cameron, the Chancellor cannot resist the Tory hunger for tax cuts indefinitely.

He faces a tough task weighing up the competing demands of the Blue Collar Conservatives and more traditionalist Tories and finding the billions needed to make significant tax cuts at a time of continuing austerity.

He will be under pressure to find a way of satisfying both camps.

Under Margaret Thatcher the Conservative Party succeeded in appealing both to middle Britain and the aspiring working class.

The current crop of Tory ministers is struggling to repeat that winning formula.

Yet that is the challenge to which Mr Osborne will have to face up if he is serious about making the move next door from Number 11 to Number 10.